Exhibit 10.18
EXECUTIVE EMPLOYMENT AGREEMENT
EXECUTIVE EMPLOYMENT AGREEMENT, effective as of September 26,
2005 by and between INTERSTATE HOTELS & RESORTS, INC., a
Delaware corporation ((the “Company”), INTERSTATE
MANAGEMENT COMPANY, L.L.C., a Delaware limited liability company
(the “LLC”) and any successor employer, and Leslie Ng
(the “Executive”), an individual residing at
.
The
Company and the LLC desire to employ the Executive in the capacity
of Chief Investment Officer, and the Executive desires to be so
employed, on the terms and subject to the conditions set forth in
this agreement (the “Agreement”);
Now,
therefore, in consideration of the mutual covenants set forth
herein and other good and valuable consideration the parties hereto
hereby agree as follows:
1.
Employment; Term . The Company and the LLC each hereby
employ the Executive, and the Executive agrees to be employed by
the Company and the LLC, upon the terms and subject to the
conditions set forth herein, for a term of three (3) years,
commencing on September , 2005 (the
“Commencement Date”), and ending on September 26,
2008 unless terminated earlier in accordance with Section 4 of this
Agreement; provided that such term shall automatically be
extended from time to time for additional periods of one calendar
year from the date on which it would otherwise expire unless the
Executive, on the one hand, or the Company and the LLC, on the
other, give notice to the other party and parties prior to such
date that it elects to permit the term of this Agreement to expire
without extension on such date. (The initial term of this Agreement
as the same may be extended in accordance with the terms of this
Agreement is hereinafter referred to as the
“Term”).
2.
Positions; Conduct.
(a) During
the Term, the Executive will hold the title and office of, and
serve in the position of Chief Investment Officer of the Company
and the LLC. The Executive shall undertake the responsibilities and
exercise the authority customarily performed, undertaken and
exercised by persons situated in a similar executive capacity
including, but not limited to, responsibility for the supervision
and activities of the development and acquisitions department. The
Executive shall perform such other specific duties and services
(including service as an officer, director or equivalent position
of any direct or indirect subsidiary without additional
compensation) as they shall reasonably request consistent with the
Executive’s position.
(b)
During the Term, the Executive agrees to devote his full business
time and attention to the business and affairs of the Company and
the LLC and to faithfully and diligently perform, to the best of
his ability, all of his duties and responsibilities hereunder.
Nothing in this Agreement shall preclude the Executive from
devoting reasonable time and attention to (i) serving, with
the approval of the Board, as a director, trustee or member of any
committee of any organization, (ii) engaging in charitable and
community activities and (iii) managing his personal
investments and affairs; provided that such
activities do not involve any
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material
conflict of interest with the interests of the Company or,
individually or collectively, interfere materially with the
performance by the Executive of his duties and responsibilities
under this Agreement, Notwithstanding the foregoing and except as
expressly provided herein, during the Term, the Executive may not
accept employment with any other individual or entity, or engage in
any other venture which is directly or indirectly in conflict or
competition with the business of the Company or the LLC
(c) The
Executive’s office and place of rendering his services under
this Agreement shall be in the principal executive offices of the
Company which shall be in the Washington, D.C. metropolitan area,
Executive will be present in the principal executives offices of
the Company at least two days each week unless it is not practical
for a given week as a result of the Executive traveling on Company
business outside the Washington, D.C. or New York City metropolitan
areas. During the Term, the Company shall provide the Executive
with executive office space, and administrative and secretarial
assistance and other support services at the Company’s
corporate offices consistent with his position as Chief Investment
Officer and with his duties and responsibilities hereunder. The
Company will also provide office space to the Executive at one of
the hotels managed by a subsidiary of the Company in New York
City.
3.
Salary; Additional Compensation; Perquisites and
Benefits;
(a) During
the Term, the Company and the LLC will pay the Executive a base
salary at an aggregate annual rate of not less than $285,000 per
annum, subject to annual review by the Compensation Committee of
the Board (the “Compensation Committee”), and in the
discretion of such Committee, increased from time to time. Once
increased, such base salary may not be decreased. Such salary shall
be paid in periodic installments in accordance with the
Company’s standard practice, but not less frequently than
semi-monthly.
(b) For
each fiscal year during the Term, the Executive will be eligible to
receive a bonus from the Company. The award and amount of such
bonus shall be based upon the achievement of predefined operating
or performance goals and other criteria established by the
Compensation Committee, which goals shall give the Executive the
opportunity to earn a cash bonus equal to an amount between 0% and
100% of base salary.
(c) In
addition to the bonus referenced in Paragraph 3(b) above, Executive
will be eligible to participate in the Company’s Development
Incentive Plan on terms agreed to by the Chief Executive
Officer.
(d) As
a signing bonus the Executive will be granted on the Commencement
Date an amount of restricted stock equal to $225,000 based on the
closing price of the shares of the Company’s common stock on
the Commencement Date. The shares granted pursuant to this
Paragraph 3(c) shall fully vest on March 1, 2006 and shall not
subject to Section 5 or any other conditions.
(e) During
the Term, the Executive will participate in all plans now existing
or hereafter adopted by the Company or the LLC for their management
employees or the general benefit of their employees, such as any
pension, profit-sharing, deferred compensation
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plans,
bonuses, stock option or other incentive compensation plans, life
and health insurance plans, or other insurance plans and benefits
on the same basis and subject to the same qualifications as other
senior executive officers. Notwithstanding the foregoing, the
Company and the LLC may, in their sole discretion, discontinue or
eliminate any such plans.
(f) The
Executive shall be eligible for stock option and restricted stock
award grants from time to time pursuant to the Company’s
Incentive Plan in accordance with the terms thereof. All such
grants shall be at the discretion of the Board. Executive shall
receive a separate option agreement governing any such grants. As
of the Commencement Date, the Executive will be granted
(i) 20,000 shares of restricted stock of the Company which
will vest annually on a ratable basis over three years and
(ii) 25,000 options in the Company’s stock which will
vest annually on a ratable basis over three years. Subject to
annual Board approval which shall be solely at the Board’s
discretion, it is contemplated that Executive will be eligible for
future annual grants of 20,000 shares of restricted stock and
25,000 options in the Company’s stock,
(g)
The Company and the LLC will reimburse the Executive, in accordance
with its standard policies from time to time in effect, for all
out-of-pocket business expenses as may be incurred by the Executive
in the performance of his duties under this Agreement.
(h) The
Executive shall be entitled to vacation time to be credited and
taken in accordance with the Company’s policy from time to
time in effect for senior executives, which in any event shall not
be less than a total of four weeks per calendar year. Such vacation
time shall not be carried over year to year, and shall not be paid
out upon termination of employment, or upon expiration of this
Agreement,
(i) To
the fullest extent permitted by applicable law, the Executive shall
be indemnified and held harmless by the Company and the LLC against
any and all judgments, penalties, fines, amounts paid in
settlement, and other reasonable expenses (including, without
limitation, reasonable attorneys’ fees and disbursements)
actually incurred by the Executive in connection with any
threatened, pending or completed action, suit or proceeding
(whether civil, criminal, administrative, investigative or other)
for any action or omission in his capacity as a director, officer
or employee of the Company or the LLC.
Indemnification
under this Section 3(i) shall be in addition to, and not in
substitution of, any other indemnification by the Company or the
LLC of its officers and directors. Expenses incurred by the
Executive in defending an action, suit or proceeding for which he
claims the right to be indemnified pursuant to this Section 3(i)
shall be paid by the Company or the LLC, as the case may be, in
advance of the final disposition of such action, suit or proceeding
upon the Company’s or the LLC’s receipt of (x) a
written affirmation by the Executive of his good faith belief that
the standard of conduct necessary for his indemnification hereunder
and under the provisions of applicable law has been met and
(y) a written undertaking by or on behalf of the Executive to
repay the amount advanced if it shall ultimately be determined by a
court that the Executive engaged in conduct, including fraud,
theft, misfeasance, or malfeasance against the Company or the LLC,
which precludes indemnification under the provisions of such
applicable law. Such written undertaking in clause (y) shall
be accepted by
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the
Company or the LLC, as the case may be, without security therefor
and without reference to the financial ability of the Executive to
make repayment thereunder. The Company and the LLC shall use
commercially reasonable efforts to maintain in effect for the Term
of this Agreement a directors’ and officers’ liability
insurance policy, with a policy limit of at least $25,000,000,
subject to customary exclusions, with respect to claims made
against officers and directors of the Company or the LLC;
provided, however, the Company or the LLC, as the
case may be, shall be relieved of this obligation to maintain
directors’ and officers’ liability insurance if, in the
good faith judgment of the Company or the LLC, it cannot be
obtained at a reasonable cost. While employed by the Company,
Executive will be covered by the directors’ and
officers’ liability insurance policy on the same terms and
conditions as are all other Executives of the Company. If the
Company decides to not longer maintain directors’ and
officers’ liability insurance policy, the Company will notify
Executive.
4.
Termination.
(a) The
Term will terminate immediately upon the Executive’s death,
Disability, or, upon thirty (30) days’ prior written
notice by the Company, in the case of a Determination of
Disability. As used herein the term “Disability” means
the Executive’s inability to perform his duties and
responsibilities under this Agreement for a period of more than 120
consecutive days, or for more than 180 days, whether or not
continuous, during any 365-day period, due to physical or mental
incapacity or impairment. A “Determination of
Disability” shall occur when a physician, reasonably
satisfactory to both the Executive and the Company and paid for by
the Company or the LLC, finds that the Executive will likely be
unable to perform his duties and responsibilities under this
Agreement for the above-specified period due to a physical or
mental incapacity or impairment. Such decision shall be final and
binding on the Executive and the Company; provided that if
they cannot agree as to a physician, then each shall select and pay
for a physician and these two together shall select a third
physician whose fee shall be borne equally by the Executive and
either the Company or the LLC and whose Determination of Disability
shall be binding on the Executive and the Company. Should the
Executive become incapacitated, his employment shall continue and
all base and other compensation due the Executive hereunder shall
continue to be paid through the date upon which the
Executive’s employment is terminated for Disability or
Determination of Disability in accordance with this section.
(b) The
Term may be terminated by the Company upon notice to the Executive
and with or without “Cause” as defined herein.
(c) The
Term may be terminated by the Executive upon notice to the Company
and with or without “Good Reason” as defined
herein.
5.
Severance.
(a) If
the Term is terminated by the Company for Cause,
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(i)
the Company and the LLC will pay to the Executive an aggregate
amount equal to the Executive’s accrued and unpaid base
salary through the date of such termination;
(ii)
all unvested options and unvested restricted shares will terminate
immediately; and
(iii)
any vested options issued pursuant to the Company’s Incentive
Plan and held by the Executive at termination, will expire ninety
(90) days after the termination date,
(b) If
the Term is terminated by the Executive other than because of
death, Disability or for Good Reason,
(i)
Company and the LLC will pay to the Executive an aggregate amount
equal to the Executive’s accrued and unpaid base salary
through the date of such termination;
(ii)
all unvested options and unvested restricted shares terminate
immediately; and
(iii)
any vested options issued pursuant to the Company’s Incentive
Plan and held by the Executive at termination, will expire ninety
(90) days after the termination date.
(c) If
the Term is terminated upon the Executive’s death or
Disability,
(i)
the Company and the LLC will pay to the Executive’s estate or
the Executive, as the case may be, a lump sum payment equal to the
Executive’s base salary through the termination date, plus a
pro rata portion of the Executive’s bonus for the fiscal year
in which the termination occurred;
(ii)
the Company will make payments for one (1) year of all
compensation otherwise payable to the Executive pursuant to this
Agreement, including, but not limited to, base salary, bonus and
welfare benefits;
(iii)
all of the Executive’s unvested stock options will
immediately vest and such options, along with those previously
vested and unexercised, will become exercisable for a period of one
(i) year thereafter; and
(iv)
all of the Executive’s unvested restricted stock will
immediately vest and all of the restr
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